Fee Clause Interpretation/Indemnity: Defendants Were Not Prevailing Parties Under Standard Indemnity and Guaranty Provisions

Neither One Conferred A Fee Entitlement Basis To Defendants, Requiring Reversal Of Fee Award.

    In Judicial Council of California v. Jacobs Facilities, Inc., Case Nos. A140890/A141393 (1st Dist., Div. 1 Aug. 20, 2015) (partially published; fee discussion not published), defendants were awarded contractual attorney’s fees under an indemnity provision and a guaranty.  That ruling had to be overturned given that they were no longer prevailing parties based upon a reversal by the appellate court.  However, the reviewing court put the kibosh on fee entitlement altogether, determining (1) the indemnity clause was a true third-party indemnity clause which should not be transformed into a fee-shifting clause, and (2) the guaranty could not confer an independent right to fees where the underlying contractual obligation had no fees clause applicable to the “base” contract.